The Unheralded Growth in Fannie and Freddie’s Multifamily Portfolio

Allison Edwards

The collapse of Fannie Mae and Freddie Mac’s single-family mortgage portfolio sat at the center of the Great Recession, but another aspect of their portfolio has been growing substantially over the last decade while receiving comparatively little attention. AAF’s Director of Financial Services Policy Thomas Wade analyzes how their role in the multifamily lending market has expanded—and examines the risk this portfolio imposes in the event of another financial crisis.

His central points:

While largely stable now, the multifamily sector has at times been responsible for over half of the GSEs’ losses in the past, leading Freddie Mac to exit the market briefly in the early 1990s; and

The GSEs’ multifamily portfolio has been growing rapidly recently, as the GSEs have used exemptions to provide credit beyond their limits, raising concerns about increased risk for taxpayers in this sector.